Letters: Time to do away with Pa.'s 'vendor discount'

Posted: June 10, 2010

People talk a lot about having government "work smarter" and want it to take advantage of technology to help reduce the cost of providing services. One way the commonwealth of Pennsylvania can save $74 million is to eliminate the "vendor discount" it pays to retailers who collect and remit sales taxes to the state ("Same as it ever was," June 1).

A 2008 report from Good Jobs First found that only two states gave away more money in these discounts than Pennsylvania. Because Pennsylvania can't cap the amount of discounts a company can get, the lion's share of the benefit is going to a few huge retailers.

Vendor discounts probably made sense 50 years ago, when companies had to employ legions of bookkeepers to manually tabulate cash-register receipts and write checks to the state.

Today, this work is automated, even for the smallest of retailers. Computers do the work, but vendors are still receiving their discounts like clockwork. The rest of us - and our employers - are expected to make timely payments of all other taxes to the state and do it for free.